Facebook offers 50.6 million more shares, new $34-$38 price range

Facebook offers 50.6 million more shares, new $34-$38 price range

Summary: Facebook has increased its IPO price range from $28-$35 to $34-$38 per share, and is also selling 50.6 million more shares. Facebook will thus raise between $13.19 billion and $14.75 billion.

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As expected, Facebook today once again updated its filing for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC). This is the seventh time it has done so, and the biggest change is that has increased its IPO price range from $28-$35 to $34-38.

Here's the relevant text that was inserted in the seventh amendment:

In early May 2012, in consultation with the underwriters, we determined the anticipated initial public offering price range to be $28.00 to $35.00 per share. Subsequently, in mid-May 2012, we increased the anticipated initial public offering price range to $34.00 to $38.00 per share. The assumptions supporting the revised anticipated initial public offering price range represented management’s best estimates and discussions between us and the underwriters after approximately one week of marketing of the offering, and involved complex and subjective judgments. We believe the difference between the fair value of our Class B common stock as of January 31, 2012, which was $30.89 per share, and the revised anticipated initial public offering price range is due to many factors and we are unable to quantify the amount that any particular factor contributed to the increase in price. However, it should be noted that the two values were determined through different methodologies. The January 31, 2012 valuation followed the methodologies used in 2011 and was influenced in large part by third-party private stock sale activity that occurred in January 2012, whereas the revised anticipated initial public offering price range is primarily a result of the increased likelihood of consummating our initial public offering in the near term and our most recent conversations with the underwriters associated with our initial public offering. The revised anticipated initial public offering price range is also based on the assumption that our initial public offering has occurred and that a public market for our Class A common stock has been created, and therefore excludes any marketability or illiquidity discount, which was appropriately taken into account in our board of directors’ fair value determination as of January 31, 2012.

Furthermore, Facebook is now selling an additional 50.2 million shares.

Here's the relevant text:

We and the selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to 50,612,302 additional shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of Class A common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of Class A common stock as the number listed next to the underwriter’s name in the preceding table bears to the total number of shares of Class A common stock listed next to the names of all underwriters in the preceding table.

Previously, given the sale of some 337.4 million shares, the price range meant Facebook could raise between $5.04 billion and $6.30 billion for itself, as well as between $4.41 billion and $5.51 billion for its investors. The company estimated it will likely net $5.6 billion from the offering if it achieves a mid-point price of $31.50 per share.

Now, given the sale of 388.0 million shares, the new price range means Facebook could raise anywhere between $13.19 billion and 14.75 billion. Here is the relevant document filed today with the SEC you may want to check out for more information: Amendment No. 7 to Form S-1 REGISTRATION STATEMENT.

Facebook is widely expected to start trading on the Nasdaq this week under the "FB" ticker. Many believe this Friday is the big day; shares will be priced on May 17, with trading beginning on May 18. Another rumor says there could be a delay, but as every day passes, that seems less and less likely.

See also:

Topics: Social Enterprise, Banking, Legal

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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  • I have a hard time

    I have a hard time believing people are going to jump on this IPO to buy umm, well not a lot of anything when it comes down to it.
    NoAxToGrind